香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 China ZhengTong Auto Services Holdings Limited 中 國 正 通 汽 車 服 務 控 股 有 限 公 司 （根據開曼群島法律註冊成立的有限公司） （股份代號：1728） 截至2023年6月30日止六個月的中期業績公告 中國正通汽車服務控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣佈本公司 及其附屬公司（統稱「本集團」）截至2023年6月30日止六個月的未經審核綜合中期業績， 連同下文所載2022年同期的比較數字。 摘要 截至2023年6月30日止六個月： • 收益增加約11.2%至約人民幣12,310百萬元，乃主要由於新車銷售數量有所增加； • 整體毛利減少約33.6%至約人民幣630百萬元，毛利率下降3.5個百分點至5.1%，乃 主要由於新車平均售價有所下降； ...

Financial Performance - In 2022, the company's revenue was RMB 22,606,790, an increase from RMB 20,985,529 in 2021, reflecting a growth of approximately 7.7%[35] - The company reported a loss attributable to equity shareholders of RMB 296,285 in 2022, a significant improvement compared to a loss of RMB 3,622,131 in 2021[35] - The total liabilities of the company increased to RMB 27,508,315 in 2022 from RMB 25,589,165 in 2021, reflecting a rise of approximately 7.5%[36] - The group's net cash inflow from operating activities for the year was approximately RMB 159 million, slightly up from RMB 156 million in 2021[19] - The group's gross profit for the year ended December 31, 2022, was approximately RMB 1,587 million, an increase of about 28.4% compared to RMB 1,236 million in 2021, primarily due to increased new car sales and controlled sales costs[84] - The net loss for the year ended December 31, 2022, was approximately RMB 297 million, a decrease of about 92.1% from RMB 3,781 million in 2021, with a loss margin of approximately 1.3%[87] Assets and Liabilities - As of December 31, 2022, the total assets of the company were RMB 27,732,759, compared to RMB 26,129,786 in 2021, indicating a growth of about 6.1%[36] - As of December 31, 2022, the group's cash and cash equivalents were approximately RMB 734 million, an increase of about RMB 525 million from RMB 209 million as of December 31, 2021[19] - The group's current assets as of December 31, 2022, were approximately RMB 13,830 million, an increase of about RMB 1,039 million from RMB 12,791 million in 2021[90] - The group's current liabilities as of December 31, 2022, were approximately RMB 18,911 million, a decrease of about RMB 2,930 million from RMB 21,841 million in 2021, mainly due to a reduction in short-term loans[90] Sales and Distribution - The group sold a total of 56,264 new vehicles in the year ended December 31, 2022, representing a year-on-year growth of approximately 9.4%, including 45,334 luxury and ultra-luxury vehicles, which grew by about 14.2%[54] - New car sales revenue was approximately RMB 18,845 million, up about 10.9% from RMB 16,989 million in 2021, accounting for 83.4% of total revenue in 2022[74] - The sales of luxury and ultra-luxury brand vehicles generated revenue of approximately RMB 17,491 million, a year-on-year increase of about 13.0% from RMB 15,483 million in 2021, representing 92.8% of new car sales revenue[74] - The group achieved a total of 1,070,313 after-sales service instances in 2022, generating after-sales service revenue of approximately RMB 3,081 million[55] Inventory and Supply Chain - The group's inventory as of December 31, 2022, was approximately RMB 4,064 million, an increase of about RMB 1,415 million from RMB 2,649 million in 2021, primarily due to increased new car inventory based on market demand[20] - The average inventory turnover days for 2022 was 48.4 days, an increase of 16.9 days from 31.5 days in 2021, attributed to expanded operational scale and increased year-end inventory due to the pandemic[20] - The group's sales cost for the year was approximately RMB 21,020 million, an increase of about 6.4% from RMB 19,750 million in 2021, consistent with the rise in new car sales[75] Strategic Initiatives - The company aims to focus on luxury and ultra-luxury car brands, enhancing strategic partnerships with major manufacturers, including those in the new energy sector[25] - The company is actively adapting to market opportunities in the automotive distribution industry, particularly in new energy and new distribution models[25] - The company plans to expand its used car business and explore opportunities in the new energy service industry, aiming for higher gross profit returns[107] - The company is actively seeking collaboration opportunities with other established new energy dealers to facilitate business transformation and upgrade[41] Corporate Governance - The board of directors consists of six members, including three executive directors and three independent non-executive directors[121] - The board has established an independence assessment mechanism to enhance board efficiency and identify areas for improvement[132] - The company has implemented a training program for newly appointed directors to ensure they understand the business and regulatory responsibilities[134] - The company has arranged directors' and officers' liability insurance to protect its executives from legal actions arising from company activities[126] Employee and Management - As of December 31, 2022, the company employed 7,181 staff, a decrease from 7,760 in the previous year, with employee costs for the year amounting to approximately RMB 985 million[104] - The company has adopted a competitive compensation and benefits plan to attract and retain high-quality employees, including a four-tier training system for staff development[110] - The company emphasizes maintaining competitiveness and risk resistance as it transitions from a private enterprise to a state-owned enterprise management mechanism[47] Market Trends - The penetration rate of new energy vehicles in the Chinese market reached nearly 30% in 2022, indicating a significant shift in consumer demand[40] - The automotive industry in China saw a year-on-year increase of 11.2% in production and 9.5% in sales, with total passenger vehicle production and sales reaching 23.83 million and 23.56 million units, respectively[40] - The company anticipates a strong rebound in automotive consumption in 2023, driven by economic recovery and increased domestic demand[111]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示概不會就因本公告全部或任何部份內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 China ZhengTong Auto Services Holdings Limited 中 國 正 通 汽 車 服 務 控 股 有 限 公 司 （根據開曼群島法律註冊成立的有限公司） （股份代號：1728） 截至2022年12月31日止年度之全年業績公告 業績摘要 面對市場環境巨大的挑戰，在五年戰略規劃的指引和國資股東的大力支持下，本集團 在主業恢復、授權維護、業務拓展、融資授信、內控管理、人才培養等多方面取得了 良好的工作成效，在業績表現方面也實現大幅減虧，為可持續、高質量發展奠定堅實 基礎。 截至2022年12月31日止年度： • 本集團收益約為人民幣22,607百萬元，同比2021年約人民幣20,986百萬元增長7.7%。 • 總體毛利約為人民幣1,587百萬元，較2021年的約人民幣1,236百萬元，上升約為 28.4%。總體毛利率約為7.0%，同比2021年約5.9%上升1.1個百分點。 ...

Financial Performance - For the six months ended June 30, 2022, the company recorded revenue of approximately RMB 11,069 million, representing a year-on-year growth of about 15.2%[4] - The gross profit for the same period was approximately RMB 949 million, showing a significant year-on-year increase of approximately 2,961.3%[4] - The group's revenue for the six months ended June 30, 2022, was approximately RMB 11,069 million, an increase of about 15.2% compared to RMB 9,612 million in the same period of 2021[30] - Revenue from new car sales was approximately RMB 9,281 million, up about 22.7% from RMB 7,566 million in the first half of 2021, accounting for 83.8% of total revenue[30] - The group's gross profit for the six months ended June 30, 2022, was approximately RMB 949 million, a significant increase of about 2,961.3% compared to RMB 31 million in the same period of 2021, with a gross margin of 8.6%[32] - Operating profit for the six months ended June 30, 2022, was approximately RMB 533 million, compared to an operating loss of approximately RMB 762 million in the same period of 2021[36] - The net profit for the six months ended June 30, 2022, was approximately RMB 6 million, a turnaround from a loss of approximately RMB 1,519 million in the first half of 2021[39] - The company reported a net profit of RMB 5,675 for the period, a significant turnaround from a net loss of RMB 1,518,695 in 2021[114] - The company reported a net profit of RMB 8,150,000 for the six months ended June 30, 2022, compared to a loss in the previous period[132] Sales and Market Performance - The company sold a total of 26,100 new vehicles, reflecting a year-on-year growth of approximately 6.9%, including 21,452 luxury and ultra-luxury vehicles, which grew by approximately 17.9%[6] - The after-sales service segment achieved a total of 573,615 service instances, generating after-sales service revenue of approximately RMB 1,468 million[8] - The company plans to focus on the automotive sales service business in the second half of 2022, particularly enhancing its luxury brand agency operations, aiming for continuous high-speed growth[53] - The company intends to expand its used car business significantly, improving the scale and profitability of certified used car retail operations, while also enhancing the market influence of its used car brand[53] - Revenue from after-sales services was RMB 1,467,521 thousand, a decrease of 9.0% from RMB 1,613,169 thousand in the previous year[149] Operational Efficiency and Strategy - The company is focusing on enhancing customer experience through digital management systems and personalized services, aiming to increase customer retention and expand its customer base[8] - The company is strategically closing underperforming outlets and transitioning brands to improve overall profitability while enhancing brand image and customer experience[12] - The company is focusing on optimizing brand structure and dealership profitability while exploring market opportunities in new energy and new dealership models[14] - The company is committed to enhancing its operational efficiency and cost advantages through digitalization and standardization of processes[53] - The company has adopted a restricted share award plan, with a total of 47,100,000 shares awarded since the adoption date, accounting for approximately 1.92% of the issued shares at that time[83] Financial Position and Assets - The group's cash and cash equivalents as of June 30, 2022, were approximately RMB 1,005 million, an increase of about RMB 796 million from RMB 209 million as of December 31, 2021[41] - The average inventory turnover days increased to 40.8 days for the first half of 2022, up from 27.5 days in the same period of 2021[47] - The group's current assets as of June 30, 2022, were approximately RMB 13,343 million, an increase of about RMB 552 million from RMB 12,791 million as of December 31, 2021[40] - The total assets as of June 30, 2022, amounted to RMB 13,610,174, compared to RMB 13,338,841 at the end of 2021, reflecting growth in asset base[121] - The total liabilities decreased to RMB 7,132,778,000 as of June 30, 2022, from RMB 7,140,928,000 at the end of the previous period[132] Governance and Compliance - The company has implemented a comprehensive governance structure to enhance decision-making and internal controls[26] - The company has established a risk management framework to identify and mitigate operational risks effectively[27] - The company is committed to high standards of corporate governance to protect shareholder interests and enhance corporate value and accountability[88] - The company has complied with the corporate governance code, with the roles of chairman and CEO being separated since March 10, 2022[96] - The audit committee, composed entirely of independent non-executive directors, reviewed the unaudited interim financial statements for the six months ended June 30, 2022[100] Challenges and Market Conditions - The supply chain segment reported a revenue of approximately RMB 220 million in the first half of 2022, a decrease of 24.4% year-on-year due to pandemic impacts and supply chain disruptions[23] - The second-hand car market saw a total transaction volume of 758.52 million units in the first half of 2022, a year-on-year decrease of 10.07%, but June alone saw a month-on-month increase of 19.20%[9] - The company has not engaged in any significant acquisitions or disposals of subsidiaries or joint ventures in the first half of 2022[61] Future Outlook - The company is actively developing new products and technologies, including a series of digital projects aimed at enhancing customer lifecycle management[27] - The company is actively collaborating with new energy vehicle brands to expand its service offerings in the new energy vehicle sector, leveraging its resources for rapid network expansion[53] - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[110]

Financial Performance - In 2021, the company reported revenue of RMB 20,985.5 million, a 24.8% increase from RMB 16,880.9 million in 2020[10] - The company experienced a loss before tax of RMB 2,213.6 million in 2021, compared to a loss of RMB 10,395.4 million in 2020, indicating an improvement[10] - The gross profit for 2021 was approximately RMB 1,236 million, a significant recovery from a gross loss of RMB 5,173 million in 2020[29] - The net loss attributable to equity holders was approximately RMB 3,622 million, reduced from RMB 8,579 million in 2020, marking a decrease of about 57.8%[29] - The basic loss per share improved to approximately RMB 133.8 cents, down from RMB 334.8 cents in 2020, reflecting a reduction of about 60.1%[29] - The company reported a revenue of RMB 601 million for its supply chain business in 2021, representing a year-on-year growth of 3.72%[53] - New car sales revenue was approximately RMB 16,989 million, up about 34.8% from RMB 12,606 million in 2020, accounting for 81.0% of total revenue in 2021[70] - The net loss for the year was approximately RMB 3,781 million, a reduction of about 56.0% from RMB 8,589 million in 2020, with a loss margin of 18.0%[79] Operational Expansion - The company expanded its operational network to 118 locations across 40 cities in 17 provinces and municipalities by the end of 2021, adding 4 new outlets during the year[5] - The group opened 4 new operational outlets in 2021, bringing the total to 118 outlets across 40 cities in 17 provinces and municipalities[44] - The group has been authorized to establish 5 new dealership outlets for luxury brands, including Porsche and Mercedes-Benz, with plans for rapid development[44] - The company expanded its dealership network by adding one Porsche and one Mercedes-Benz dealership during the reporting period[29] Market Trends and Strategy - The luxury car sales segment showed significant growth, with the company focusing on high-end brands such as Porsche, BMW, and Mercedes-Benz[5] - The overall automotive market in China is shifting towards a concentration of leading dealers, with increased competition in the used car and after-sales service sectors[17] - The Chinese automotive market is projected to continue growing, with domestic brands capturing over 40% market share and significant increases in export volumes[17] - The company is strategically positioned to leverage the dual circulation model of the economy, enhancing its market presence amid changing consumer behaviors[17] - The company aims to enhance its after-sales service to meet the growing demand in the automotive market, emphasizing high-quality and rapid service[7] Technological Investment - The company is investing in new technologies and services to adapt to the evolving automotive ecosystem, including electric vehicles and integrated service offerings[17] - The group is actively pursuing digital transformation to drive innovation, focusing on customer lifecycle management and operational efficiency improvements[39] Customer Experience and Service - The group achieved a total of 1,352,572 after-sales service instances in 2021, generating after-sales service revenue of approximately RMB 3,105 million[33] - The company aims to enhance operational capabilities and customer experience through brand upgrades and increased interaction with manufacturers[44] - The company is actively entering the new energy vehicle market and enhancing its service experience in this sector[29] Corporate Governance - The company has committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[113] - The board has delegated daily management responsibilities to the CEO and senior management while retaining oversight of strategic decisions[126] - The company has adopted a set of securities trading rules that are at least as stringent as the standard rules outlined in the listing rules[118] - The company has established three committees: remuneration, nomination, and audit, each with clear written terms of reference to oversee specific aspects of the company's affairs[149] ESG Commitment - The ESG report for 2021 highlights the company's commitment to environmental and social responsibilities, addressing key ESG issues of concern to stakeholders[185] - The group has identified key ESG issues including product health and safety, supply chain management, and customer privacy, focusing on performance improvement in these areas[194] - The group is committed to sustainable development, integrating ESG principles into all operational activities to minimize negative environmental impacts[197] - The group has established a top-down ESG governance structure, with the board overseeing environmental and social matters, including risk assessment and management[198]

Financial Performance - In the first half of 2021, the company recorded revenue of approximately RMB 9,612 million, representing a year-on-year increase of about 8.23%[7] - The company reported a loss attributable to equity holders of approximately RMB 1,455 million, with a basic loss per share of approximately RMB 0.54, representing a year-on-year increase of about 6.59%[7] - The group's revenue for the first half of 2021 was approximately RMB 9,612 million, an increase of about 8.2% compared to RMB 8,881 million in the same period of 2020[41] - The company reported a net loss of approximately RMB 1,519 million for the first half of 2021, compared to a loss of RMB 1,323 million in the first half of 2020[50] - The company incurred a net loss of 1,455,474 for the six months ended June 30, 2021, compared to a loss of 1,518,695 in the same period of the previous year[149] - The total comprehensive loss for the six months ended June 30, 2021, was RMB 1,516,106, compared to RMB 1,328,152 in 2020, indicating an increase in loss of about 14.2%[129] Vehicle Sales and Market Performance - The company sold a total of 24,424 new vehicles in the first half of 2021, reflecting a year-on-year growth of approximately 13.2%, including 18,198 luxury and super-luxury vehicles, which grew by about 3.6%[8] - The luxury car market in China saw sales of approximately 1.472 million units in the first half of 2021, a year-on-year increase of 39.7%[4] - New car sales revenue was approximately RMB 7,566 million, up 12.0% from RMB 6,758 million in the first half of 2020, accounting for 78.7% of total revenue[41] - Revenue from passenger vehicle sales was RMB 7,566,395 thousand, up from RMB 6,757,976 thousand, indicating a growth of about 11.9%[166] After-Sales and Service Revenue - The after-sales service business recorded a total of 592,551 service instances in the first half of 2021, a year-on-year decrease of approximately 3.5%, with service revenue of RMB 1,613 million, down 8.9% year-on-year[11] - The company’s revenue from after-sales services decreased to RMB 1,613,169 thousand from RMB 1,769,919 thousand, a decline of approximately 8.8%[166] - The gross profit from after-sales services was approximately RMB 568 million, a decline of 24.4% compared to the same period last year, resulting in a gross margin of 35.2%[11] Financial Services and Loans - Dongzheng Automotive Finance's loan scale decreased by 29% from RMB 57.5 billion on December 31, 2020, to RMB 41.1 billion by June 30, 2021[16] - Net interest income for Dongzheng Automotive Finance was RMB 164 million, a decrease of 43% compared to the same period in 2020[16] - Dongzheng Automotive Finance reported a net loss of RMB 260 million for the first half of 2021, compared to a net profit of RMB 143 million in the same period of 2020[16] - The non-performing loan ratio for Dongzheng Automotive Finance was 10.7% as of June 30, 2021[17] Operational Developments - The company opened one new Mercedes-Benz store and one new Porsche store during the reporting period, further expanding its advantageous brand network[7] - The company actively engaged in the new energy vehicle market, attempting new business operation models and accumulating service experience[7] - The company implemented differentiated sales strategies based on brand market performance to expand sales scale and profitability[9] - The company has restored credit limits with financial institutions to support rapid business development following the resolution of liquidity risks[9] Inventory and Cash Flow - Inventory as of June 30, 2021, was approximately RMB 2,090 million, an increase of about RMB 288 million from RMB 1,802 million at the end of 2020[56] - Operating cash flow for the six months ended June 30, 2021, was negative at -60,069, compared to positive 569,205 for the same period in 2020[149] - Cash and cash equivalents were reported at RMB 319,390 thousand, a decrease from RMB 395,119 thousand at the end of 2020[136] Shareholder and Equity Information - The company completed a supplementary agreement with Xiamen Guotai Holdings, adjusting the number of shares to be transferred to 820,618,184 shares, representing 29.9% of the total issued share capital, for a total consideration of HKD 1,427,875,640.16, equivalent to HKD 1.74 per share[71] - As of June 30, 2021, the total number of issued shares was 2,744,542,420 shares, with the largest shareholder, Yidu, holding 50.41% of the shares[75] - The company has a stock option plan that allows for the issuance of up to 200,000,000 shares, which is approximately 7.29% of the total issued share capital as of the report date[83] - The company has established a trust for the shares granted under the stock incentive plan, ensuring that the beneficiaries are properly managed[74] Strategic Initiatives and Future Plans - The group plans to introduce strategic investment partners to eliminate liquidity risks and improve operational efficiency in the short term[66] - The group aims to enhance its luxury brand network and provide high-value services to improve market competitiveness in the mid-term[66] - The group is committed to transforming and upgrading its operations to create greater value for shareholders, employees, and society in the long term[66] - The group is actively exploring new marketing models, utilizing multiple online platforms for customer interaction to enhance marketing channels and improve business development efficiency[38]

CHINA ZHENGTONG AUTO SERVICES HOLDINGS LIMITED 中國正通汽車服務控股有限公司 (Incorporated under the laws of the Cayman Islands with limited liability) （根據 開 曼 群 島 法 律 註 冊 成 立 的 有 限 公 司 ) Stock Code 股份代號：1728 US DENOMINATED SENIOR NOTES DUE 2022 於 2 0 2 2 年 到 期 之 美 元 計 值 優 先 票 據 Stock Code 股份代號 : 40132 2020 ANNUAL REPORT 年報 A LEADING LUXURY BRANDS DEALER CONGLOMERATE 目錄 2 公司簡介 3 五年財務概要 6 主席報告書 10 管理層討論與分析 25 企業管治報告 34 環境、社會及管治(ESG)報告 54 董事及高級管理人員簡介 57 董事會報告 77 獨立核數師報告 87 綜合損益表 88 綜合損益及其他全面收入表 89 綜合財務狀況表 91 綜合權益變動表 92 綜合現金 ...

Financial Performance - For the first half of 2020, the company recorded revenue of approximately RMB 9,241 million, a year-on-year decrease of about 47.0%[8] - The group's revenue for the first half of 2020 was approximately RMB 9,241 million, a decrease of about 47.0% compared to RMB 17,431 million in the same period of 2019[45] - New car sales revenue was approximately RMB 6,758 million, down 52.1% from RMB 14,099 million in the first half of 2019, accounting for 73.1% of total revenue[45] - After-sales service revenue was approximately RMB 1,770 million, a decrease of 27.3% from RMB 2,435 million in the first half of 2019, representing 19.2% of total revenue[45] - The group's gross profit for the first half of 2020 was approximately RMB 1,230 million, down 40.0% from RMB 2,051 million in the same period of 2019, with a gross margin of 13.3%[47] - The company reported a net loss of RMB 1,323 million for the six months ended June 30, 2020, compared to a profit of RMB 520 million in the same period of 2019[121] - The company recorded an impairment loss on goodwill and intangible assets of approximately RMB 916 million and RMB 549 million, respectively[51] - The total comprehensive loss for the period was RMB 1,328.15 million, compared to a total comprehensive income of RMB 518.69 million in the same period of 2019[121] Sales and Operations - The company sold a total of 21,572 new vehicles in the first half of 2020, representing a year-on-year decline of approximately 58.6%[9] - The luxury and ultra-luxury brand vehicle sales amounted to 17,570 units, down approximately 57.0% year-on-year[9] - The after-sales service business experienced a decline, with 613,815 service instances, a year-on-year decrease of about 13.0%[12] - The average replacement rate in key first-tier cities approached 40%, indicating stable growth in vehicle replacement despite declining new car sales[13] - The company faced significant challenges due to COVID-19, particularly with 16 of its 4S stores located in Hubei province, which had slower recovery rates[8] - The company implemented new marketing strategies, including online interactions and competitive marketing plans, to mitigate the impact of the pandemic[10] Financial Services - As of June 30, 2020, Dongzheng Automotive Finance's loan scale decreased by 18.5% to RMB 8.15 billion from RMB 10 billion at the end of 2019[16] - The net interest income for Dongzheng Automotive Finance was RMB 289 million, an increase of 30.1% compared to the same period in 2019[16] - The net profit for Dongzheng Automotive Finance was RMB 143 million, a decrease of 29.2% compared to RMB 202 million in the same period of 2019[16] - The total registered capital of Dongzheng Automotive Finance was RMB 2.14 billion, providing strong financial support for its loan business[19] - The company has established a full-cycle automotive financial ecosystem, integrating various financial services including retail loans and dealer financing[16] Cost Management and Efficiency - The company is focusing on optimizing procurement channels and enhancing parts turnover to control costs effectively[12] - The group implemented a tiered management system for dealerships, significantly improving resource allocation efficiency and overall profitability[42] - The group launched a new cloud platform management system in collaboration with Tencent to enhance service capabilities and operational quality[41] - The company has implemented stricter cost control measures and limited discretionary capital expenditures to improve its financial condition[152] Employee and Operational Changes - The total employee cost was approximately RMB 375 million, a decrease from approximately RMB 453 million for the same period in 2019, with 9,023 employees in China[67] - The company offered 122 courses on its learning platform, with over 30,000 total learning sessions by employees in the first half of 2020[43] - Employee costs decreased to RMB 375,028,000 in the first half of 2020, down 17.3% from RMB 453,420,000 in the same period of 2019[166] Future Outlook and Strategy - The company anticipates a rapid recovery in macroeconomic conditions and automotive consumption in China as the COVID-19 pandemic is effectively controlled, with a focus on the luxury car market[68] - The company plans to introduce strategic investment partners in the short term to mitigate negative impacts from COVID-19 and restore business operations quickly[68] - The long-term strategy includes integrating resources and enhancing external cooperation to create a world-class automotive service brand, focusing on the entire lifecycle of customer vehicle usage[68] Shareholder and Governance Information - As of June 30, 2020, the total number of issued shares was 2,452,220,420, with major shareholder Yidu Holdings Limited holding 56.42%[71] - The company has adopted a stock option plan effective from December 10, 2010, allowing the issuance of up to 200,000,000 shares, which represents approximately 7.41% of the company's issued share capital as of the report date[82] - The company has adopted the corporate governance code and has complied with its provisions throughout the reporting period[108] Impairment and Financial Challenges - The company incurred an impairment loss of RMB 1,465.41 million on goodwill and intangible assets, which was not present in the previous year[118] - The company experienced significant operational and financial impacts due to COVID-19, particularly in regions with higher concentrations of 4S dealerships[191] - The company is focusing on generating sufficient cash inflows and securing financing to address its liquidity challenges in the upcoming year[115]

Financial Performance - In 2019, the total revenue of China Zhengtong Auto Services Holdings Limited was RMB 35,137.8 million, a decrease of 3.5% compared to RMB 37,455.5 million in 2018[10] - The company's profit before tax for 2019 was RMB 1,163.1 million, down 38.4% from RMB 1,889.5 million in 2018[10] - The net profit attributable to equity shareholders for 2019 was RMB 663.9 million, a decline of 45.5% from RMB 1,224.1 million in 2018[10] - The gross profit for 2019 was approximately RMB 3,818 million, down about 14.9% compared to the previous year[31] - Profit attributable to equity holders was approximately RMB 664 million, with basic earnings per share of RMB 0.271, representing declines of approximately 45.8% and 45.7% respectively[31] - New car sales revenue was approximately RMB 28,564 million, down about 9.4% from RMB 31,529 million in 2018, accounting for 81.3% of total revenue in 2019[89] - Revenue from luxury and ultra-luxury brand car sales was approximately RMB 25,986 million, a decrease of about 8.4% from RMB 28,383 million in 2018, representing 91.0% of new car sales revenue in 2019[89] - After-sales service revenue increased by approximately 10.2% to RMB 4,771 million from RMB 4,331 million in 2018, accounting for 13.6% of total revenue, up by 2.0 percentage points year-on-year[89] Operational Highlights - As of December 31, 2019, the total assets of the company were RMB 44,858.0 million, a slight increase from RMB 44,199.2 million in 2018[11] - The company operated 135 dealerships across 41 cities in 17 provinces and municipalities in China by the end of 2019[6] - The company plans to enhance its brand structure and network layout, focusing on the development of new energy vehicle services[31] - The company is committed to increasing investment in information technology research and employee training to improve operational efficiency and service quality[31] - The company aims to optimize inventory management through a data-driven approach, enhancing the efficiency of working capital usage[37] - The company will continue to explore innovative service models and improve customer service processes to enhance overall operational quality[30] - The group strategically closed 7 underperforming outlets to enhance operational competitiveness and profitability[72] - The group has been authorized to establish 10 new dealership outlets for core luxury brands, expanding its competitive advantage in traditional provinces and entering rapidly developing regions[72] Market Trends - The luxury car market in China saw a 6.5% increase in sales, with major luxury brands selling 2.98 million vehicles in 2019[19] - BMW sales in China reached 724,000 units in 2019, representing a growth of 13.1% year-on-year[19] - By the end of 2019, the total number of privately owned vehicles in China was 22.635 million, reflecting a year-on-year growth of 9.2%[24] - In 2019, the national used car transaction volume reached 14.92 million units, an increase of 8.0% year-on-year, indicating a slowing growth rate as the industry enters a new adjustment phase[42] After-Sales Services - The after-sales service business achieved a total of 1,517,701 service instances, an increase of approximately 17.1% year-on-year, with after-sales revenue of approximately RMB 4,771 million, up 10.2%[38] - The after-sales gross profit was approximately RMB 2,138 million, resulting in an after-sales gross margin of about 44.8%[38] - The after-sales service business focuses on customer needs, enhancing customer satisfaction through optimized business processes and personalized service offerings[39] - The company is exploring new business models and revenue growth points around the entire customer lifecycle to ensure sustainable growth in after-sales services[39] Financial Services - The loan portfolio of Dongzheng Automotive Finance increased by 18.7% to RMB 10,004 million as of December 31, 2019, compared to RMB 8,426 million at the end of 2018[43] - Net interest income for Dongzheng Automotive Finance rose by approximately 22.1% to RMB 536 million in 2019[43] - The non-performing loan ratio for Dongzheng Automotive Finance was 0.44% in 2019, with a loan provision ratio of 1.89% and a coverage ratio of 423.97%[43] - Dongzheng Automotive Finance's registered capital was increased to RMB 2.14 billion in 2019, enhancing its capital adequacy ratio to support loan operations[48] - The dealer network for Dongzheng Automotive Finance exceeded 900 dealers by December 31, 2019, covering over 172 cities and nearly 200 mid-to-high-end 4S stores[48] Corporate Governance - The board consists of eight members, including five executive directors and three independent non-executive directors[135] - The company has adopted a securities trading code that complies with the standards set out in the listing rules[134] - The board has confirmed compliance with the securities trading code for the year ended December 31, 2019[134] - The company has established a diversity policy for board members, considering various factors such as professional experience, gender, and age[153] - The company provides formal training for newly appointed directors to ensure they understand the business and regulatory requirements[157] - The board has authorized the executive committee to manage daily operations, which includes the CEO and four other executive directors[144] Risk Management - The company has established a comprehensive risk management system to enhance credit risk management and optimize risk management capabilities[50] - The company has developed and launched a full-process transaction system, with a big data risk control system enabling online business approval in seconds[54] - The company has established a strategic cooperation agreement with China People's Insurance Company, providing real-time coverage for loan performance insurance, reducing funding risks[54] - The board is responsible for maintaining a robust risk management and internal control system, with a commitment to review its effectiveness at least once a year[183] Environmental, Social, and Governance (ESG) - This report is the fourth ESG report published by the group since its first release in 2017[198] - The report focuses on the sales, after-sales service, and supply chain business of luxury and ultra-luxury brand vehicles in China, covering all business segments for social data and significant environmental impact from vehicle sales and after-sales services[199] - The group has begun systematically collecting environmental data and vehicle recall information, selecting 29 representative stores as pilot collection sites to accumulate experience for future expansion[199]

Financial Performance - In the first half of 2019, the group recorded revenue of approximately RMB 17,431 million, a year-on-year decrease of about 7.1%[8] - The group achieved a gross profit of approximately RMB 2,051 million, down approximately 11.0% year-on-year, primarily due to weak new car sales[8] - The net profit attributable to equity holders was approximately RMB 471 million, with basic earnings per share of approximately RMB 0.192, both down about 33.8% year-on-year[8] - New car sales revenue was approximately RMB 14,099 million, down about 10.8% from RMB 15,805 million in the first half of 2018, accounting for 80.9% of total revenue[48] - After-sales service revenue increased by approximately 7.8% to RMB 2,435 million, representing 14.0% of total revenue, up 2.0 percentage points year-on-year[48] - The group's gross profit for the first half of 2019 was approximately RMB 2,051 million, a decrease of about 11.0% from RMB 2,304 million in the same period of 2018[52] - The gross profit margin was approximately 11.8%, down 0.5 percentage points from 12.3% in the first half of 2018[52] - The group's operating profit for the six months ended June 30, 2019, was approximately RMB 1,305 million, a decrease of about 14.5% compared to RMB 1,526 million in the first half of 2018[55] - The net profit for the same period was approximately RMB 520 million, down about 28.4% from RMB 726 million in the first half of 2018[59] - The company reported a decrease in other income to RMB 386,475 from RMB 471,227 in the previous year, a decline of 18.0%[115] - The profit before tax was RMB 767,608, down 28.8% from RMB 1,079,878 in 2018[115] Sales and Market Trends - New car sales totaled 52,060 units in the first half of 2019, a year-on-year decline of approximately 5.6%, with luxury and ultra-luxury brand sales at 40,869 units, down about 3.8%[11] - The luxury car market in China saw a 9.0% year-on-year increase in sales, totaling 1,440,000 units in the first half of 2019, despite an overall decline in the passenger car market[4] - The second-hand car market saw a total of 6,862,000 transactions in the first half of 2019, marking a year-on-year growth of 3.9%[16] After-Sales and Service - The after-sales service business achieved a total of 705,610 service instances in the first half of 2019, representing a year-on-year increase of approximately 14.1%[14] - After-sales revenue reached approximately RMB 2,435 million, a year-on-year growth of 7.8%, with a gross profit of approximately RMB 1,127 million and a gross margin of about 46.3%[14] - The company is actively exploring new business models and revenue growth points in the after-sales service sector to enhance customer experience and loyalty[15] Financial Services - The financial services segment generated interest and service income of approximately RMB 466 million, an increase of 27.7% compared to the same period last year[20] - The net amount of customer loans and advances increased from RMB 8,426 million to RMB 9,969 million, reflecting a growth rate of 18.3%[20] - The non-performing loan ratio for Dongzheng Automotive Finance was 0.33%, with a loan provision ratio of 1.57% and a provision coverage ratio of 471.01%[20] - Dongzheng Automotive Finance aims to establish a comprehensive automotive financial ecosystem, providing a one-stop service for all automotive-related financial products[20] Operational Efficiency and Management - The group is developing a data-driven management platform to optimize inventory management and improve operational efficiency[12] - The group continues to strengthen partnerships with luxury car manufacturers and is committed to enhancing customer service experience through refined management and innovative practices[4] - The group is focusing on strategic mergers and innovative operational cooperation models to enhance business scale and profitability[39] - The group has partnered with Tencent Technology to develop a new generation "cloud platform" operational management system to improve service capabilities and customer experience[45] - The group is implementing a tiered management system for dealerships to enhance performance evaluation and resource allocation[47] Expansion and Network Development - The number of dealers in the sales network increased from 1,280 as of December 31, 2018, to 1,373 as of June 30, 2019[23] - The company operates 141 dealership outlets across 41 cities in 17 provinces and municipalities as of June 30, 2019, with plans to expand further into new regions[37] - The company has authorized 13 new dealership outlets, focusing on luxury and super-luxury automotive brands, enhancing its competitive advantage in traditional and rapidly developing regions[37] Logistics and Infrastructure - The company is expanding its logistics infrastructure with the construction of a multi-modal logistics base in Wuhan, expected to be completed by the end of 2020[34] - The company has introduced strategic investors to enhance its logistics capabilities and improve operational efficiency, aiming for sustained revenue growth[35] Shareholder and Capital Management - Joy Capital Holdings Limited holds 1,383,516,820 shares, representing 56.42% of the company's equity as of June 30, 2019[76] - Citigroup Inc. holds 62,578,459 shares, accounting for 2.55% of the company's equity, as well as additional controlled entity interests[80] - The company declared an interim dividend of HKD 0.10 per share for the six months ending June 30, 2019, to be paid on or around October 25, 2019[102] - The company completed a placement of 226 million new shares at HKD 7.70 per share, raising approximately HKD 1,727 million for the development of its automotive finance business[101] Accounting and Financial Reporting - The company has adopted the revised Hong Kong Financial Reporting Standard No. 16 from January 1, 2019, without restating comparative figures[116] - The adoption of Hong Kong Financial Reporting Standard 16 ("Leases") has been implemented since January 1, 2019, affecting the accounting treatment of leases[150] - The initial measurement of lease liabilities is based on the present value of lease payments, discounted using the interest rate implicit in the lease or the incremental borrowing rate[153] - The Group's lease liabilities as of January 1, 2019, amounted to RMB 1,730,954,000 after applying the Hong Kong Financial Reporting Standard 16[165] Employee and Operational Metrics - As of June 30, 2019, the group employed 12,053 employees in China, a decrease from 12,353 employees as of December 31, 2018[73] - Total employee costs for the six months ended June 30, 2019, were approximately RMB 453 million, compared to RMB 425 million for the same period in 2018, representing a year-over-year increase of 6.6%[73] Future Outlook - The group anticipates steady growth in China's macro economy and an increase in disposable income, leading to a gradual rise in demand for luxury vehicles[74] - The competitive landscape has shifted from an incremental market to a stock market, with consumers demanding higher quality and service from automotive products[74] - The group aims to enhance operational efficiency and innovate management practices by leveraging its diversified luxury brand portfolio and advanced automotive fintech platform[74]